Housing Mess Started With Bill Clinton In 1999

[Sheriff Gonna Getcha]

Originally Posted by firstdown

Well for all of you blaming Bush for this mess look to your hero Bill Clinton who passed new lending laws in 1999.


Hot Air » Blog Archive » A great example of how we got to the credit-market meltdown

First, Clinton didn't pass any new laws. The Constitution does not permit the President to pass any legislation. Moreover, the Community Reinvestment Act was enacted in 1977, not 1999.

Second, the collapse of the housing market cannot be attributed to minorities becoming home owners. The CRA was designed to benefit low income areas, which includes inner cities and rural areas (predominantly white areas). Moreover, banks were making money hand over fist on those sub-prime loans. As long as home prices kept skyrocketing, the banks were reaping huge rewards and not incurring many risks. The CEOs running those lending institutions knew the market could collapse, but they were far more concerned with making great profits on a quarterly basis.

[firstdown]

Originally Posted by Sheriff Gonna Getcha

First, Clinton didn't pass any new laws. The Constitution does not permit the President to pass any legislation. Moreover, the Community Reinvestment Act was enacted in 1977, not 1999.

Second, the collapse of the housing market cannot be attributed to minorities becoming home owners. The CRA was designed to benefit low income areas, which includes inner cities and rural areas (predominantly white areas). Moreover, banks were making money hand over fist on those sub-prime loans. As long as home prices kept skyrocketing, the banks were reaping huge rewards and not incurring many risks. The CEOs running those lending institutions knew the market could collapse, but they were far more concerned with making great profits on a quarterly basis.

The reason the CEO's where making all those loans is because a bill was passed in the 1990's allowing banks to sell these loans so they could get off the loan without all the risk involved. Fed & Fan ended up holding the notes to these loans and the rest is history. I know Clinton did not creat all of this on his own I was just making the point that it goes way back and everyone involved shares the blame. I also know Clinton cannot make laws but he got the mandate passed (which he signed) to force lenders to make allot of these bad loans. If you read the entire article the banks then came up with those Arm Loans so they could make these loans which was mandated that they do. All you have to do is type in Clinton and 1999 home loans and there is a bunch of stuff that changed in those years.

[FRPLG]

Originally Posted by Sheriff Gonna Getcha

Second, the collapse of the housing market cannot be attributed to minorities becoming home owners. The CRA was designed to benefit low income areas, which includes inner cities and rural areas (predominantly white areas). Moreover, banks were making money hand over fist on those sub-prime loans. As long as home prices kept skyrocketing, the banks were reaping huge rewards and not incurring many risks. The CEOs running those lending institutions knew the market could collapse, but they were far more concerned with making great profits on a quarterly basis.

I would respectfully disagree. Sort of. Minorities owning property has nothing to do with it. Broke people getting loans does. These loans were first decreed by the gov't, insured by the gov't and then banks were sued for not giving them. There is a reason that homes prices tracked closely with inflation for decades. Banks didn't like giving out bad loans...they lost money on them. Once it became polically fashionable (read: buying votes) politicians started talking about "affordable housing" which means broke people buying houses. But banks said no. So the gov't went ahead and passed laws requiring "diversified" portfolios and then out of the other side of their mouths insured the loans so banks could afford to implement this new program. Magically home prices sky rocketed as the demand for homes exploded.

So the gov't makes banks give the loans and then creates a way for the banks to make profits on them and we want to blame the banks when they give out the loans? Sure there are greedy people but last time I checked companies are supposed to make money. When they get put out of business for not following laws they can't make money. When the gov't gives them an easy way to make money and they don't take it then they get fired.

On top of all this the two companies that insured, or bought, these loans were cooking their books to fool as many politicans as possible into thinking everything was great. When some did say that the situation was getting bad many others screamed back with uninformed and intellectually devoid arguments. Unfortunately the people who had an iota of what was actually happening didn't have the guts or the political capital to force some actual oversite.

This whole situation is a damn disaster but the politcs being played with it make me laugh. BO wants to blame this on lack of oversite by Repubs? Are you freaking kidding me? Well no f*cking sh*t there was not enough oversite! It's just not W's fault. In any way. Whatsoever. Let's go back in time an when Clinton and the Repubs wanted to create an oversite group and the Dems blithely dismissed them maybe we can kneecap those dummies so they can't get a vote because they were the ones who stopped it. Not Bush or McCain. The Dems. FACT. I blame the Repubs for not stopping this crap because they were too gutless to force a change. But I blame the basic principles of the Dems for causing it and then letting politics stop them from seeing the reality of the situation.